Beyond the Roof: Five Costs That Can Leave an HOA Reserve Plan Short

A roof line in a reserve study is one number. The project behind it is much larger than the shingles, and the money can fall short in ways that a list of components won’t show.

So this guide looks at gaps in a project budget, not at which assets cost the most. We have no data on how often each gap occurs, so treat these as questions to ask.

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1. The work under the visible surface

Some damage stays hidden until the old material comes off. Roof decking is the usual example, and the same idea applies to the framing behind siding or stucco.

One news story relays a California homeowner’s Reddit post about a $32,000 reroof. The crew said the deck needed replacing once the shingles were off, which added $13,000. That’s one unverified account of a single house, not a typical result, but the sequence is the point: the bill changed after the tear-off.

A replacement figure may not cover this. Our own sample report says that its roof figure leaves out framing or sheathing repairs. Exclusions like that are normal, as long as the board knows about them.

Ask: What does this figure leave out? What is the unit price for hidden repairs, and how much of that work does the bid include?

2. The cost of getting the work done

Materials and labor are only part of a project. The explanation of the national standards says component costs should “include all related expenses the association should expect to complete the project.” Its list includes design, permits, installation and disposal.

Tall buildings, tight sites and shared walls can add scaffolding, lifts, traffic control or the removal of whatever is in the way. Those costs depend on the site, so a figure from another property may not fit yours.

Ask: Does this figure include access, removal, disposal, permits and any outside design help? If not, where are they?

3. Shared systems that are hard to see

Water, sewer and drainage lines are often buried, so their condition and timing are hard to judge. The standards say a project that can’t be estimated with reasonable certainty fails the test for reserve funding.

That means a study may properly leave one out. One study firm says most associations treat these lines as “life of the property” items, and it suggests a “repair allowance” as another way to handle them. Being left out of the study doesn’t make the cost go away, so the board should know who pays if a line fails.

Ask: Which shared systems are outside the study, and why? Does the association own them? Is there an allowance, and what would a failure cost?

4. Several projects arriving together

A balance can look healthy until a few large projects land close together. Here’s a fictional community with 64 units, $320,000 in reserves and $45,000 added each year. Its roof costs $400,000 today, its paint $90,000 and its paving $120,000. We assumed 3% inflation and 2.5% interest.

The costs today and the savings are the same in both rows. Only the timing changes, and the second row is a gap of about $550 per unit. This example leaves out every other project, so a real plan will look different. Try your own schedule in the calculator.

Ask: Which years hold the most spending? Could a project safely move, and what would moving it cost?

5. An inspection isn’t the repair

Budgeting for an inspection pays for the report. It doesn’t pay for the work the report recommends.

The explanation of the standards says a structural integrity report can point to upcoming corrective projects “outside the scope of your reserve study inspection.” So one report’s findings may not appear in another report’s numbers unless someone connects them.

Ask: Do we have any inspection reports with open items? Has each item been priced, and does it appear in the reserve plan, the operating budget or neither?

What if a project costs more?

Costs can run over for any of these reasons, and the standards warn about projects that “occur earlier or are more expensive than predicted.” The tool below shows what a higher bid does to one project and your balance. It’s a quick test for one project, not a full plan.